it across the central plains and central great lakes and i would say the chance of strong storms would be between 3:00 in the afternoon and 6:00 this evening. >> on behalf of reynolds wolf and me, t. j. holmes, we would like to say thank you for spending part of your weekend with us on saturday and sunday morning. we hand it over to "state of the union." >> a lot of heat inside a lot of meetings which produced no debt deal. today, dodging default with white house budget director jacob lou, and republican senator, lindsay graham. rudy giuliani. >> and i don't know why they want to get involved in personal lives and sexual lives. stay out of it. and then the former republican congressman, tom davis. i am candy crowley, and this is "state of the union."

the president said he wanted a deal by friday, so lawmakers met with him at the white house day after day after day. they took a break on friday, and the president pushed again. >> if washington operates as usual, and can't get anything done, let's at least avert armageddon. >> joining me now, white house budget director, mr. lou. thank you for being here. >> thank you, candy. >> we are told by sources since the white house meeting on thursday and this morning, there has been no progress. do you concur? >> a lot has been going on since the white house on thursday night. >> there has been activity, but has there been progress? >> there has been activity and progress on two fronts. there is substantial discussions going on in the senate between the two leaders to make sure at a minimum congress has a way to take action and avoid default on the u.s. debt.

that's critical. we don't think it's enough. we think the president said clearly we should do as much as we can to reduce the deficit, but we have to avoid the chaos that would result from default. >> you're talking about the mcconnell and reid way out of not having a -- it cuts 1.5, actually -- >> my understanding is what they are working on now would simply provide a mechanism for extending a debt and have a committee to work on the deficit. the president has been clear that we need to do more than that, and the time to act is now. in addition to that, there have been a lot of conversations going on among parties, the president said on thursday that each leader should go back to their own caucus and talk to each other and go back and forth with the administration and that has been going on since thursday. >> you talked to folks as well as the grand deal and the medium deal? >> yeah, there are a lot of

conversations. >> conversations are not progress. where do you think that you have made progress? >> i think it's not insignificant that all the leaders understand that it would be irresponsible to get to august 2nd and not extend the ability of the united states to pay its obligations. >> do enough members of congress understand that? >> i think as we approach it, more and more seem to be coming to it. there will be a fringe that believes it will be playing with armageddon is a good idea, but i don't think that's where a majority will be. >> any white house meetings today with any of the principals? >> i have not been to the office this morning, but i think i will find out when i get there. >> okay. you seem fairly confident at the very least there will not be default on the 2nd? >> i have confidence that ultimately the responsible leadership in washington will not fail to take an action, where failure would mean interest rates that would amount to a tax on all americans when

they buy a home or car, and it would create chaos in the world economy, and i am confident the leaders in congress know that's not an option pn. >> you have to make spending priorities and payment priority decisions, and social security benefits, and federal worker pay, and defense contractors. what are your priorities shoe not have the debt ceiling raised on the 2nd, when you have the bills that immediately come due? social security checks, federal worker pay, defense contractors? >> our plan is for the congress to do its work and the president to sign into law legislation that will make it possible for the united states as it always has to keep the obligations. we will be ready to deal with whatever happens. there is no plan other than meeting our obligations. >> certainly you must have discussed priorities, though, we have to pay this? >> the truth is this is a different situation the united states has ever faced. we have never gone into a situation where we didn't have

enough money to pay our bills. we borrow 40 cents to a dollar right now. if the time comes when we lose the ability to pay our bills, there will be a cash flow issue that is very real, and that's why it's critical that congress take action before august 2nd. >> would you allow it to happen with the social security checks to go out? >> it's not a question of allowing -- >> but you get to decide priorities. there will be money -- >> there will not be enough money to pay all the bills. >> of course not, that's why we're talking about priorities. >> when we talk about priorities, it misses the question that it's unacceptable for the united states to be in a place where somebody owed money by the government can't be paid because we have not done our job. >> one of the things as you know that some republicans are pushing is a balanced budget

amendment, a constitutional amendment to require a balanced budget under certain circumstances. this is what the president had to say the other day. >> i think it's important for everybody to understand that all of us believe that we need to get to a point where eventually we can balance the budget. we don't need a constitutional amendment to do that. >> but apparently you do need something to do that, because we're facing a meltdown you all keep saying, and yet there is not a deal and yet we don't have a deal that will raise the debt and forego a meltdown. what is so wrong with a balanced budget amendment? >> just to be clear, if not now when? congress needs to act. there is plenty of time to make decisions now. what these ideas do is say let's kick the can down the road so others will deal with it. the challenge is for washington now to do the job the american people sent us to do.

the amendments, what it does, it would force us to cut social security and medicare, more deeply than the house resolution budget did. that's not what the american people want. i think the principle that really should be governing right now is that congress do the job that it was sent here to do, and the president wants to work with congress. he has shown a willingness to move substantially. we need a partner to work with and we need to get the job done and we need to get the job done now and we need to get as much done as we can do, because the whole world is watching. the u.s. credit rating is at stake, and our place in the world is at stake. >> what the debt most needs is a growing economy, and in that nature i want to read you something, and our source here is reuters. this is from a goldman sachs

report that went out last night. following another week of weak economic data we have cut our estimates for real gdp growth in the second quarter of 2011 to 1.5% growth in the third quarter, and 2.5% in the fourth quarter, and we expect the unemployment rate to come down modestly to 8 3/4% at the end of 2012. what that means, of course, is you can't make a substantial effort towards the debt, as opposed to the deficit with growth low, can you? >> it has been a difficult few weeks in the economy. there have been some external factors from the nuclear accident in japan to other things, and it made growth slower. there's still a consensus we will return to growth, but it's not enough growth and the president has made clear we need to stay focussed on growing the economy and creating jobs. >> do you agree that growth will

be lower than you all thought? >> i would agree that the recent weeks have been slower than expected. we are still confident as are most forecasters we will return to growth and we will remain a growing economy. >> more than you had hoped, though, looking at it? >> there are things now that would make a difference. we done quite a lot in the first two years, the president and congress took action, and without which we would have millions more without work. we have pending proposals on the hill which would do a lot to grow the economy and create jobs, it should pass patten reform. the president made clear we need to look at extending the payroll tax deduction. the average american family has $1,000 in their pocket. there are things that we need to do to get them done. >> thank you so much. we appreciate your time. go to the white house and let us know what is going on. we appreciate it. >> thank you, candy. up next, we will talk to one that says his party should negotiate with democrats on tax

increases or closing loopholes. senator lindsay graham right after the break. we all have internal plumbing.

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south carolina, republican senator, lindsay graham. i think you just heard the director of office of budget and management say he believes republicans are beginning to understand that default is a own russ option. do you see any kind of coming together of republicans around a way that will avoid default? >> absolutely. i think the house will pass next week, cut cap and balance. it does three things. it will take the government spending in the near term back to around 2008 spending levels. it will have a cap on spending over the next decade to make sure we wipe out the debts in a 10-year period, and will require a passive of a balanced budget

amendment out of congress, and those three things will balance the debt limit. those will pass the house unanimously. i would urge every democrat -- >> you can't pass it in the senate. you can't pass that in the senate, can you? >> i think so. they will never -- let me just say this. what is calamitous is the track we're on as a nation, we're becoming greece, we are borrowing 40 cents of every dollar. a child born today has $46,000 of debt. now is the time to do real things that will matter. 49 states have the requirement to balance their budget. i am convinced after being here since 1995, candy, neither party will balance the budget until there is discipline in the system, and the system that will bring discipline is a balanced budget amendment in the constitution, which i think will be ratified in a couple years. >> i must say, jacob lew just

told us the conditions on the balanced budget amendment would require huge cuts in medicare and in social security. they have a majority -- the democrats have a majority in the senate. this does not at this moment in its current form sound to me like something that will pass in the senate. then what? >> well, we will negotiate the number of gdp spending is 18%, and the balance budget amendment in the house is going to limit spending of 18% of the gdp, which is the 40-year average. that's subject to being negotiated with republicans and democrats. the super majority to raise taxes is subject to being negotiated. i don't think what is subject to being negotiated is the idea of avoiding a balanced budget, when the president said we don't need one. what rational person could look over the congress in the past 40 years, and there's no plan going to achieve balance in congress

unless the constitution is changed to make us do it. i am very willing to raise the debt limit -- >> what happens -- let's just say somehow that there is a balanced budget amendment -- >> you can adjust it. >> huge things happen. katrina happens. tornados run through all of the midwest, and then we start a war, and you have a balanced budget amendment. what happens? >> you can waive the provisions by two thirds vote of the national. if we get attacked, another 9/11, we have a cat cliz mick event that affects our economy, we can waive that requirement. i don't see how anybody who has been in politics as long as i have can look the people in the eye and say within the body we will find a way to do this. every two years, we jockey for the next election. the big deal they're talking about of cutting spending over the next ten years, still adds

$6 trillion to the debt. the real deal to limit spending and get us in balance would be to limit our constitution. without that we will just talk to each other and run america into the ground. >> let's talk about the so-called mcconnell and reid plan, which is as i understand is not completely put together yet, but it would allow the president to raise the debt ceiling in three increments, between now and the end of next year, perhaps with spending cuts attached. as a last resort, would you vote for that in order to avoid default? >> i am sticking with the balance -- i don't have any confidence that anything republican or democratic leaders is going to lead to the solutions that we need. it never has in the past. i am looking for a win-win. i am looking for a way to raise the debt ceiling, and we need to, but we need to address fundamentally what got us into

debt. cut cap and balance will get us out of debt over time. i think that's going to be the republican position. to me it's a very sound position -- >> it's a position, but is it a solution? i think we -- >> i think so. it's the only solution. >> it just doesn't -- honestly, it has been out there for a while. we have heard of the cut cap and balance. it has not caught steam on the democratic side. you all are staring down the face of this default, and you say this is our position, and as the white house says here's our position. where is the give? you said at one point you might go for revenue increases. do you still stand by that? >> here is what would happen if we had a requirement to balance the budget. both parties would have to do it. there would be no excuses. you have to do something about entitlement spending, and it's 57% of all spending is medicare and social security and

medicaid, we would have to address that in a bipartisan fashion. we have to make hard decisions. i would be willing to close loopholes. the ethanol subsidy, i would be willing to eliminate that, and some of that money would go to retiring the debt. i would go to closing the loopholes, but i will only do that in a context to balance the budget. i have been here since 1995, and i know what is going to happen. if we passed a balanced budget it would get ratified by the states and we would get the country back on track. if we don't do that, we are kicking the can down the road. >> frank: i could get a yes or no here because we're running out of time, if you cannot get the senate to pass what the house shirley will, you will allow the u.s. to go into default or go into a plan b. >> i am going to focus on plan

a, it's the real deal, not a big deal. >> if it helps at all, the white house is not budging either. it's hard to know how you all will come to any agreements. senator lindsay graham, thank you for joining us this morning. >> thank you. up next, why rudy guiliani is considering another run for president. >> i think that i probably have the best record in terms of having done something similar to what the country needs done right now. [ female announcer ] and with charmin ultra soft, you can get that same cushiony feeling while still using less. its design is soft and more absorbent. so you can use four times less versus the leading value brand. ah. [ female announcer ] charmin ultra soft. announcer: when life's this hard, it's no wonder 7,000 students drop out every school day. visit boostup.org and help kids in your community stay in school.

in the republican presidential field we have a handful of not quite candidates conducting uncampaigns, which is sometimes a prelewd to a real campaign, and sometimes just an interesting activity or a way to drive up speaking fees. rudy guiliani is one of the not quiets.

the former new york mayor went right to the top of the polls, but early results were disappointing to put it mildly and guiliani dropped out after the first few primaries. the man that gained national prominence and accolades for his in your face take charge approach during 9/11, is patient on the new journey. he says he will decide by september. whether it's his new approach or the familiarity of his name, guiliani is doing all right in new hampshire, and he is third behind mitt romney and michele bachmann. i caught up with him at a harley davidson shop in new hampshire, really. our conversation is next. in here, the planned combination of at&t and t-mobile would deliver our next generation mobile broadband experience to 55 million more americans,

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personal pricing now on brakes. tell us what you want to pay. we do our best to make that work. deal! my money. my choice. my meineke. mr. mayor, thank you f forjoining us. great spot to meet up with you. >> great setting. >> you said you would get in if you had the best chance to beat president obama. >> uh-huh. >> let me get into your thought

process about this, if there is one. >> i am not sure how much, but we will find out. >> why, for instance, would you be better than mitt romney? >> well, i can tell you why i think i would have certain strengths. i think that i probably have the best record in terms of having done something similar to what the country needs done right now. i look at the other candidates, and they have all done very impressive things, but none of them really had to take over a city, one of the largest economies in the country and one of the most complex when it was in terrible trouble and turn it around and have definable results. i am not just saying it or believing it or thinking it, i could show that we started with one million on welfare and got it down to 500,000, and we turned the deficit into a

surplus, it's what the country needs right now. >> so you think the best person to beat president obama is someone with a turn around expert, is basically what you are saying, somebody who has governed? >> i think it would help given what the issues are right now, the economy, and i think that to look at it as objectively as he can. the economy is in very, very difficult conditions. it has been that way for a long time. president obama has presided over the longest string of high unemployment since the great depression and has not done much about it, and promised to do things about it, and said the things he did would bring unemployment down like the tremendous stimulus, and the tremendous trillion-dollar stimulus was to get us down to 7% unemployment, and it's at 9% unemployment. horrendous results. >> you have people like mitt romney, and tim pawlenty, and jon huntsman, they all have

governed states and have a record saying i helped with unemployment and this kind of thing. i am just trying to figure why -- you're trying to decide why you have a better chance to beat president obama, and i am trying to decide why you would think that given that they also have records? >> they have records and impressive records, but i don't remember their states being in the kind of condition new york city was in. i got elected on the campaign theme you can't do any worse, because we were in such bad shape. we were the crime capitol of america. we were supposed to be in decline and never come back again. "time" magazine wrote an article saying new york city's best days are behind it, and it's what they are writing about america now. we turned that around, and when i look at that as objectively as you can about yourself or the situation you're in, it seems to

me that's roughly where the country is right now. >> you sound like do i have a better shot at it, you sound like you have made up your mind? >> i haven't. i have been here six times this year and eight times last year, so i know new hampshire, and trying to figure out what kind of a chance i have here, and you have to go further than here, and win a few more, and even if you think you can win this one, and i am not sure that i can. by the end of the summer, at some point like that, i will be able to figure it out. >> is there anybody in the field right now that you could not campaign for should you decide not to run? >> i don't think so. they have not all laid out their case now, so i don't have a sense of who the best ones are yet. look, i am going to campaign for a republican candidate for president, whether it's somebody like myself or somebody new in the field, and some are pretty

impressive. >> who is that that impresses you that is not in yet? >> rick perry is not in yet, and rick has got a great record, probably one of the strongest records of any in america, and one of the longest running governorships. rick is a good friend. >> he's talking to raisers next week. >> last time i had a lot with john mccain, which was part of the problem, also. john just beat us. >> let me ask you to stand by. when we come back, we want to talk a little bit about the debt ceiling talks. we'll be right back. >> sure. i need to reach peter, who's falling behind. and push janet who's 6 chapters ahead. ♪ [ male announcer ] with interactive learning solutions from dell, mrs. davis can make education a little more personal.

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once again we're with former new york mayor, rudy guiliani. i wonder, the republican party, from what you are watching in washington, is losing the political edge here. do you think politically they are beginning to lose the battle with the president? >> no. no, no. i think that the battle at who is going to win it or who will lose it is still up for grabs,

and it's hard to know. i am sort of disappointed that it's come down to that. this shouldn't be about does the president win, or do the republicans win? >> it always does. it's washington, as you know. >> this is too big -- it's too big of an issue to play chicken with it. >> you have said you think the debt ceiling has to be raised. >> america should not the default. i sympathize with the people who stay, secretary geithner could be exaggerating, and i don't want to test it. i can tell you that there's not a good thing to default. that's not a good thing to do. particularly for us who are conservative republicans who have a great deal of sense that you have to have a balanced budget and pay your debts and kind of work these things out, and you can compromise somewhat but you can't compromise too much, so i hope -- >> if you were sitting at the table, would you say, yeah, i will agree to closing loopholes

to oil and gas companies for 1.5 or 2.5 or any amount of spending cuts? >> i wouldn't do tax increases as a way to compromise. >> any? none? >> if we're going to compromise, let's compromise about the spending decreases and the extent of them. we would like to go a lot further than the democrats would like to go. there is areas of negotiation there. i would not raise taxes? >> even if that meant putting the country in default? in the game of chicken you say -- >> i think raising taxes would be disastrous for the economy right now. we should slash corporate taxes. why does money go overseas? because the tax rate is half than in the united states and we're stupid enough to keep a 35% ceiling on the tax increase, and then sell it to tax the rich.

sure we're taxing the rich, but we're taxing ourselves out of jobs. >> somebody is going to have to blink here? >> yes, and i think that's where the compromise will have to be. there are two realities you have to come up against. there is a republican house of representatives, and the republicans don't have control. the president cannot ask the 85 new members of congress who were elected on a solemn promise they are not going to raise taxes to raise taxes. >> well, he can. if you were -- >> but then he's not a good president. in order to get somebody to compromise, you have got to figure out how to get him to do something that is not going to commit suicide. if they agreed to a tax increasing, they are committing political suicide. you don't ask somebody to shoot themselves. on the other hand, the republicans can't ask for the massive reductions they would like to get, or maybe, you know, an agreement to a balanced budget amendment, and we would like to see a balanced budget

amendment, they don't control the entire government, the senate or the presidency, and both sides have to have the mature tea a maturety, and the wisdom to figure it out. we can't ask anybody to commit suicide. you can't make a deal that way. >> let me move you along. bin laden is dead and we're told by a number of sources that al qaeda and afghanistan is down to a handful, perhaps two dozen or so. there are those in the presidential race that say we can get out a lot quicker than president obama thinks we can. is our mission done in afghanistan? >> no. no. >> why not? we got the folks that did it? >> our mission is not to capture and bring bin laden to justice, although that was a big part of it, and i commend president bush and particularly president obama for having carried it out. that was one of the high points of his presidency for which he will always get credit historically, whether he wins or

loses re-election, and it was a gutsy decision, and he carried it out 100%. the mission in afghanistan is to create a stability there so they don't threaten us in the future, so that doesn't become again the breeding ground for attacks on america the way it was in 2001. we're not there yet. afghanistan is in a state of chaos and confusion, and not in a state where we can say in good conscience where we put it in a situation where we don't need to be there to protect ourselves. and somebody has to explain to the american people that we need to be in that region of the world for the indefinite future, without time limits. far more effective would be you put in the troops and you don't tell anybody where we're going to leave. when we leave is when we accomplished our objective. >> let me ask you a final question, a domestic question.

in the next couple of weeks, the first same-sex marriages will take place legally in new york. you always said you were for civil unions, but that you thought marriage was between a man and a woman -- >> i do, and i still believe that. i think marriage should be between a man and a woman, but i think the republican party would be well advised to get out of peoples' bedrooms and let these things get decided by states, and the reality is that this is something that new york decided by a democratic vote. i think it's wrong, but there are other things that i think are wrong that get decided by democratic vote. >> you can live with it, it's fine? you don't see any harm that will come to new york -- >> i don't see harm, although i think it would be better for stabilities of families and everything else if we kept marriage between a man and a woman. i see more harm however by dwelling so much on the subject of gays and lesbians and whether it's right or wrong in politics. i think we got far -- not

necessarily more important things, but far more relevant things to talk about what government should be talking about, how to deal with afghanistan, and the budget, and if you are a libertarian republican or have a streak of libertarian republican, i don't know what the heck the republican party wants to get involved in the personal lives, and we need to stick to the conservative roots and the idea of a strong assertive american that is not embarrassed to be the leader of the world. >> mr. mayor, thank you for spending time with us in this very unusual -- it's the first time i have done an interview in a harvey davidson place. >> i am dieing to drive one of them. >> should i put yes or no on your getting in? >> betting is illegal, interestingly. >> i appreciate your time. >> thank you.

>> we have more with rudy guiliani on the website, including the reflections on the 10-year 9/11 anniversary. up next, the town hall showed republicans how hard it could be to beat him.

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of staff to joe biden, and former republican congressmen, john davis. welcome to you both. rudy guiliani you just heard say i think the republican party would be well advised to get out of peoples' bedrooms and leave gay marriage to the states to decide. i found that remarkable for a guy thinking about running for president, and it made me think he's not running. >> i am not so sure. i don't know what he's going to do. remember this, new hampshire, south carolina, florida, all of these states have independence voting in the primary, and it's generational at this point, and a lot of people think republicans are on the wrong side generalationally on this issue, and doesn't need to be part of the party flat form and

states can decide. >> and perhaps rick perry is getting closer and closer to jumping into the race. how does it change the mix? >> what it shows you is for mitt romney and sarah palin and michele bachmann and the candidates who have been out there for more than a year testing their message and trying to raise money there is a great deal of satisfaction among their own party with the choices, and here we are well into the race and people are looking for new republican candidates. that tells you a lot of what is out there now. >> does it really? i feel like whether you are a republican or democrat, you think they all look like dwaur ofs or minlg it's. >> they break into a lot of different factions. i think there is no one leader at this point. iowa is going to be tough to beat bachmann. >> we're talking about perry? >> i am talking about perry.

new hampshire will be tough for him. if he wants to get in, now is the time. romney is the leader, but it's not overwhelming at this point. that's how a guy like donald trump could get in and move to the point. at this point, the party is leaderless. >> still looking? >> yes, i will agree with leaderless. you got me there. >> let me short of put up some of the fund-raising numbers that we have seen, starting with the president who when you put together his $47 million for the re-election and add to, and $86 million, he has collected more money than the entire republican field put together. what does that tell you? >> it tells you he has a potent fund-raising machine and a potent race and will be a potent candidate for re-election. a lot of money that comes into the race now is outside parties. independent groups are raising

more money than party candidates at this point, and i think there will be plenty of money on both sides of the campaign pn >> last time around, democrats went crazy about the independent groups. this is just skirting the law. now, of course you're putting together the exact same of operations to go toe-to-toe with the republicans. >> you can't yun laterally disarm in politics, unfortunate unfortunately. this is not just about the money, it's about hundreds of thousands of grassroots donors. you know, people talk about michele bachmann being the grassroots candidate, and the president has as many as ten times grassroots donors. and there are still hundreds and thousands and millions more that will be coming in later. what you are seeing is not just money but tremendous grassroots support for the president in this election. >> when i looked at the numbers the first thing i thought was this whole story line that somehow the base is going to

abandon president obama is nonsense. >> yeah, i do think along the democratic base, and we saw it in the off-year elections, the turnout model was not as heavy, and the polarization we're seeing, it's going to be a close election. they recognize it will be a lot last time. we stim has a lot of vulnerabilities with independent voters. >> this is true. we all know that's where it is. you're going to bring new people in? >> i agree it's going to be a close election, a hard-fought election. the president has made some courageous decisions. they're starting to pay off. we're starting to see results, but we or not there yet. that will make it a very tough election. i'm confident when you look at the grassroots support the president has, rallies the base and you look at where he is in the political dialogue versus the extreme positions the republicans are taking, he's going to energize the base, capture the middle and win

re-election. >> the president does change the model in terms of voter turnouts, with minorities in particular. it makes him more formidable. >> let me ask you about the debt ceiling debate. rudy giuliani said i don't think the republicans are losing this at all. it depends on who the audience is. nonetheless, who at this point do you think is suffering -- maybe both parties are doing exactly what they went. >> let me make a point. we killed osama bin laden and now that's forgotten. really what's going to matter is where is the economy a year from now. this debate will be long forgotten. we're spending too much time over who wins. if the republicans an democrats don't come together and the economy goes into a tailspin, there will be a price to pay. >> let me ask you one thing. there's a new goldman sachs report out where its telling

investors we're lowering the growth rate and we think at the end of 2012 the unemployability rate will be no better than 8.7. that's just no way to win an election, is it? >> i think the question is who is doing more to try to help fix that. you look at the debt ceiling thing, the position of the republicans is extreme. they're talking about one-sided solutions. when ronald reagan was president, he raised the debt limit 17 times, 11 involving revenue increases. we're seeing the party of reagan become the party of bachmann. that's not a winning political strategy. >> that's twice we've heard the word extreme in two answers. we know where the democrats are going. what is the pushback when the democrats will say, as i'm sure they will, these people held up the u.s. economy trying to protect corporate jet owners and rich people. >> well, corporate jet owners -- part of that came out of the stimulus package. >> you get what i mean --

>> the republicans are the only ones that have passed the budget. the president's budget got no votes in the senate. senate democrats didn't even put the budget forward. at least the republicans have put something up. the president says we want to look at the options. dangbly he's not put nothing forward. >> that's not true. the president talked about a balanced approach that offers both revenues and spending cuts. the republicans are digging in. >> who gets hurt the most if there is no deal or if there's just a deal to kick the can down the road? who gets hurt the most? >> at this point the president has the bully pulpit. congress is divided. it always gives the president a leg up. we saw this in the clinton years. we have another week and a half to play this out. >> i think the president wins because he's the adult saying we need to do something smart, sensible, balanced, reasonable.

>> so is john boehner. >> but john boehner leads a caucus that's badly divided. he hasn't been able to deliver his own followers to follow his position. the president has the bully pulpit, seeming reasonable, seeming balanced. it's good for our country, what we need to do as a nation to keep the economy growing. >> pelosi has also drawn a line in the said, she's said no cuts to medicare medicaid. >> the republicans saved the democratic divide. in other words, that would have been a big deal except the republicans said no to tax increases. >> these members come from safe districts, most of them. it makes it hard to compromise. republicans go back and talk to republicans, democrats go back and talk to democrats. very little room for compromise. >> in the last 30 seconds. i think john boehner and barack obama have a common goal, and ha is people want their leaders to lead. so if boehner wants the house to remain republican, he needs a

deal. if the president wants to go back to the white house, he needs a deal. yes? no? >> i think the country needs a deal and i hope republicans will come to the table. >> i agree with you. history shows when presidents are re-elected congress gets re-elected. and convince the c.e.o. his email will find him... wherever he is. i need to see my family while they're still awake. [ male announcer ] with global services from dell, jim can address his company's i.t. needs through custom built applications, cloud solutions and ongoing support in over 100 countries. so his company sees results. and jim sees his family. dell. the power to do more. welcome. i understand you need a little help with your mortgage, want to avoid foreclosure. smart move. candy? um-- well, you know, you're in luck. we're experts in this sort of thing,

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now time for today's top stories. former news of the world editor rebekah brooks was arrested in connection with british police investigations into phone hacking and police bribery. casey anthony walked free from a florida jail shortly after midnight this morning. about a thousand onlookers stood outside the jail as she left with her lawyer. she was released 12 days after a jury found her not guilty on murder and child neglect charges in the death of her 2-year-old daughter caylee. the first stage of nato's handover to afghan security forces began today. libyan leader moammar gadhafi is vowing never to leave his country. his remarks were broadcast at a